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Megan, the Island Foods financial analyst is evaluating a 5-year pineapple project that will require only $15,000 in fixed assets. The equipment will be depreciated
Megan, the Island Foods financial analyst is evaluating a 5-year pineapple project that will require only $15,000 in fixed assets. The equipment will be depreciated using the straight-line method over the project's life and salvage value of the equipment is projected to be $3,750. After talking with the marketing and operations department, she has developed the following estimates. Assume a 21 percent corporate tax rate. What is the worst-case operating cash flow? Base Case Lower Bound Upper Bound 900 800 950 Unit Sales Sales price per unit $32 $26 $40 Variable cost per unit $13 $12 $14 Fixed Costs $6,000 $5,000 $7,500 0-$13,019.75 O $17,956.50 O $2,763.50 O $1,981.50 $2.131.50
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